“The volatility rose due to the unexpectedly high US inflation reported last night,” according to wealth adviser Sedek Jantan.
Sedek, who is head of wealth research at UOB Kay Hian Wealth Advisors Sdn Bhd, said the volatility in regional equity, bond and currency markets was set to return after the relative calm in the past few days.
He attributed the fall in regional markets to the sell-off in US markets.
At 5pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) dropped 19.40 points, or 1.30%, to finish at its intraday low of 1,468.44 from yesterday’s close of 1,487.84.
The benchmark index, which opened 12.60 points lower at 1,475.24, reached its highest at 1,480.55 in early trade.
Market breadth was negative with decliners thumping advancers 595 to 256, while 387 counters were unchanged, 1,113 were not traded, and 13 others suspended.
Total turnover was marginally lower at 2.63 billion units worth RM1.63 billion from 2.64 billion units worth RM1.74 billion yesterday.
Sedek said the Fed could raise interest rates by 75bps next week, a move that, he added, would keep the market volatile.
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the consumer price index (CPI) reading showed that the Fed was likely to keep raising interest rates at a sharp pace this year to combat inflation, a scenario that was negative for stock markets.
He said the short-term outlook of the local market would remain cautious. “While valuations remain cheap, we do not expect the FBM KLCI to see any major movement, thus, we anticipate it moving within the 1,460 to 1,480 points range towards the weekend,” he said.
Meanwhile, Bursa heavyweights Maybank fell seven sen to RM8.85, Public Bank dropped eight sen to RM4.44, Petronas Chemicals dipped a sen to RM8.70 and CIMB shrank six sen to RM5.39, while IHH Healthcare was flat at RM6.20.
Of the actives, both Metronic Global and Aimflex eased half-a-sen to two sen and 15 sen, respectively, Velesto Energy trimmed a sen to 10.5 sen and Top Glove was down by two sen to 78.5 sen, while SNS Network improved a sen to 30 sen.
On the index board, the FBM emas index declined 123.06 points to 10,475.20, the FBMT 100 index slid 123.22 points to 10,217.00, the FBM emas shariah index weakened 127.69 points to 10,592.79, the FBM 70 went down 106.26 points to 12,708.17 and the FBM ACE slipped 55.82 points to 4,844.90.
Sector-wise, the energy index shed 8.73 points to 718.94, the plantation index dropped 53.86 points to 6,945.04, the industrial products and services index eased 1.70 points to 181.75 and the financial services index gave up 182.94 points to 16,484.05.
The Main Market volume inched up to 1.70 billion shares worth RM1.30 billion from 1.69 billion shares worth RM1.40 billion yesterday.
Warrants turnover expanded to 298.73 million units valued at RM47.18 million from 250.05 million units valued at RM38.34 million previously.
The ACE Market volume declined to 632.45 million shares worth RM288.92 million from 697.23 million shares worth RM296.15 million yesterday.